Acquisition of Capsugel Accelerating Growth Along the Healthcare Continuum - The Future Lonza
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Acquisition of Capsugel
Accelerating Growth Along
the Healthcare Continuum
Lonza Group Ltd, Basel / 15 December 2016 ©Lonza
Additional Information and Disclaimer (1/2) Lonza Group Ltd has its headquarters in Basel, Switzerland and is listed on the SIX Swiss Exchange. It has a secondary listing on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Lonza Group Ltd is not subject to the SGX-ST’s continuing listing requirements but remains subject to Rules 217 and 751 of the SGX-ST Listing Manual. This presentation may include statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements may be identified by the use of forward-looking terminology, including the terms “believes”, “estimates”, “plans”, “pro-jects”, “anticipates”, “expects”, “intends”, “may”, “will” or “should” or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements re-flect Lonza Group Ltd’s current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to Lonza Group Ltd’s business, results of operations, financial position, liquidity, prospects, growth or strategies. Forward-looking statements speak only as of the date they are made. Each of Lonza Group Ltd, Merrill Lynch International, UBS, and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any forward-looking statement contained in this presentation, whether as a result of new information, future developments or otherwise. Lonza Group Ltd, Basel / 15 December 2016 ©Lonza 2
Additional Information and Disclaimer (2/2) This presentation is not a prospectus and not an offer of, or the solicitation of an offer to buy, securities to U.S. persons or in any jurisdiction, including in or into the United States, Canada, Japan or Australia, where such offer or solicitation is unlawful. This presentation is not an offer to sell, or a solicitation of an offer to purchase, any securities of Lonza Group Ltd, nor shall it or any part of it form the basis of, or be relied on in connection with, any contract or investment decision. The contents of this presentation have been prepared by and are the sole responsibility of Lonza Group Ltd and Capsugel. None of Merrill Lynch International, UBS, or any of their respective directors, officers, employees, advisers or agents accepts any respon-sibility or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this presentation (or whether any information has been omitted from the presentation) or any other information relating to the Lonza Group Ltd, Capsugel, and/or their subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and how-soever transmitted or made available, or for any loss, whether arising from any use of this presentation or its contents or otherwise arising in connection therewith. The information contained in this presentation is for background purposes only and does not purport to be full or complete. No reliance may be placed by any person for any purpose on the information contained in this presentation or its accuracy, fairness or completeness. This presentation is not for publication or distribution, directly or indirectly, in or into the United States, Canada, Australia, or Japan, or any other jurisdiction where such distri-bution would be unlawful. The distribution of this presentation may be restricted by law in certain jurisdictions, and persons into whose possession any document or other in-formation referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. The securities to which this presentation relates have not been and will not be registered under the United States Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. There will not be a public offering of securities in the United States. This presentation is not an offering circular within the meaning of article 652a of the Swiss Code of Obligations, nor is it a listing prospectus within the meaning of the listing rules of the SIX Swiss Exchange or a prospectus under any other applicable laws. This communication does not constitute an "offer of securities to the public" within the meaning of Directive 2003/71/EC of the European Union (the "Prospectus Directive") of the securities referred to herein in any member state of the European Economic Area (the "EEA"). Any offers of the securities referred to in this presentation to persons in the EEA will be made pursuant to an exemption under the Prospectus Directive, as imple-mented in member states of the EEA, from the requirement to produce a prospectus for offers of the Securities. In the United Kingdom, this presentation is directed exclusively at Qualified Investors (i) who have professional experience in matters relating to in-vestments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”), or (ii) who fall within Arti-cle 49(2)(A) to (D) of the Order, and (iii) to whom it may otherwise lawfully be communicated, and any investment activity to which it relates will only be engaged in with such persons, and it should not be relied on by anyone other than such persons. Lonza Group Ltd, Basel / 15 December 2016 ©Lonza 3
Table of Contents Transaction Overview Introduction to Capsugel Transaction Rationale Financial Impact Expected Timeline Conclusion Appendix Lonza Group Ltd, Basel / 15 December 2016 ©Lonza 4
Accelerating Growth
Along the Healthcare Continuum
Creates leading integrated solutions provider to the global pharma and consumer
healthcare industries
Enhances competitive position through stronger innovation, combined scale and
market leadership
Addresses needs of customers for integrated, value-added solutions that improve
and accelerate drug and ingredient delivery to patients and consumers
Enhances growth and margin profile with highly complementary product
offerings and synergistic customer base
Combines two highly regarded companies with leading quality and regulatory
track records
Lonza Group Ltd, Basel / 15 December 2016 ©Lonza 5
Expected Financial Advantages ✓ Enhanced growth profile, CORE EBITDA margin and CORE RONOA ✓ Accretive to CORE EPS in first full year post closing (1) ✓ Strong free cash flow generation to target rapid de-leveraging ✓ Near-term operating synergies of ~CHF 30 mn p.a. and tax synergies of ~CHF 15 mn p.a. by year 3 ✓ Mid to long-term top-line synergy potential of ~CHF 100 mn p.a. by year 5 Lonza Group Ltd, Basel / 15 December 2016 ©Lonza (1) Referring to consensus forecasts for Lonza and depending on Lonza share price at time of the equity raise 6
Transaction Structure
Structure Cash acquisition of 100% Capsugel shares from KKR
Enterprise value of USD 5.5 billion
Value Includes refinancing of existing Capsugel debt (~USD 2 billion)
LTM transaction EV/Adjusted EBITDA multiple of 15.1 x(1)
Fully committed financing by Bank of America Merrill Lynch and UBS of USD 6.2 billion(2)
Standby equity underwriting of up to CHF 3.3 billion
Financing Financing structure targeting around 3x net debt/EBITDA
Committed to maintaining current investment grade rating(3)
Final financing structure to include new equity, term loan and debt capital markets instruments
Closing expected in second quarter of 2017
Timing
Subject to regulatory approvals and customary closing conditions
(1) Based on LTM Sep-2016 Adj. EBITDA of USD 364 mn; based on Capsugel Management definition of Adj. EBITDA. Certain differences exist compared to Lonza’s CORE EBITDA definition.
LTM: Last Twelve Months
(2) Including CHF 700 million Revolving Credit Facility
(3) Based on unofficial credit rating assigned by a number of Swiss banks.
Lonza Group Ltd, Basel / 15 December 2016 ©Lonza 7
Introduction to Capsugel Lonza Group Ltd, Basel / 15 December 2016 ©Lonza
Capsugel: At a Glance
Design, development and manufacture of a wide range of
innovative dosage forms for the pharma and consumer health and
nutrition (CH&N) industries
Leader in hard capsule drug delivery technology
Significant scale with 200 billion capsules manufactured in 2015
Track record of rapidly growing businesses in specialized
formulation, dosage delivery and development services
2015 sales of USD 1.0 billion and
adjusted EBITDA of USD 344 million
Lonza Group Ltd, Basel / 15 December 2016 ©Lonza Source: Capsugel Management Presentation See Appendix for Adjusted EBITDA definition 9Capsugel: Business Overview
Pharmaceutical Highlights Consumer Health & Nutrition Highlights
Is recognized as a leading provider of Has wide portfolio of capsule sizes, designs
solutions in bioavailability enhancement, and polymers, including various gelatin blends
targeted delivery and capsule technologies/ Offers range of technologies that address the
encapsulation trends of today’s organic and health-
Collaborates with customers to develop conscious segments
customized solutions that meet the desired Is recognized for scientific expertise,
product profile innovative formulation / delivery technologies,
and high quality manufacturing
Has formulated more than 4,000 compounds
Key Products and Technologies
Softgel
MAST
Lonza Group Ltd, Basel / 15 December 2016 ©Lonza Source: Capsugel Management Presentation 10Capsugel: Strong Heritage
Complemented by Investments in Innovation
1874 Parke-Davis begins making first empty, two-piece hard capsules in Detroit, MI (USA)
1963 Capsugel AG founded and headquarters established in Basel
1970 Parke-Davis merged with Warner Lambert
2000 Warner Lambert acquired by Pfizer
2011 Capsugel sold by Pfizer to global investment firm KKR
2013 Acquisitions of:
Encap Drug Delivery (CDMO working on liquid and semi-solid capsule products)
Bend Research (Drug delivery technologies and formulation development)
2016 Acquisitions of:
Xcelience (Preformulation, development, small-scale commercial manufacturing and clinical packaging and logistics
Powdersize (Particle size reduction and particle size control technologies)
Lonza Group Ltd, Basel / 15 December 2016 ©Lonza Click link to find out more CDMO: Contract Development and Manufacturing Organization Source: Capsugel Management Presentation 11Capsugel: Global Manufacturing
and Research Network
Global Footprint
13 facilities on 3 continents and ~3,600 employees
More than 4,000 customers in more than 100 countries
Headquarters in Morristown, NJ (USA)
Strong R&D and Engineering Expertise
3 dedicated R&D centers
Lab-, pilot- and clinical-scale manufacturing
Proprietary manufacturing equipment providing exceptional
quality and productivity at commercial scale
Deep expertise in regulatory processes with more than 100
audits compiled annually
Patent portfolio of >170 patent families across technologies
Corporate Office Manufacturing (13 Facilities) R&D (3 facilities)
Lonza Group Ltd, Basel / 15 December 2016 ©Lonza Source: Capsugel Management Presentation 12Capsugel: Premier Provider of Dosage Form
and Development Solutions
Products CDMO
Hard Capsules Other Dosage Forms Development Services
Leader in hard capsules Premier portfolio of Emerging custom
innovative dosage forms, development business for
Industry’s broadest
technologies and services pharmaceutical customers
portfolio to customers in
pharma and consumer Solutions for customers’ Focus on drug design
health & nutrition most pressing product- based on enabled
industries development challenges – formulations for improved
such as bioavailability, bioavailability and drug
Highly customized and
targeted delivery and delivery
value-added offering
specialized formulations
Full range of innovative,
(e.g. taste masking, abuse
solid oral dosage forms
deterrent)
82% of sales(1) 11% of sales(1) 7% of sales(1)
Lonza Group Ltd, Basel / 15 December 2016 ©Lonza (1) Financials based on Capsugel management. 13Capsugel’s Leading Portfolio of Innovative
Technologies to Address Customers’ Needs
Encapsulation Bioavailability Targeted Specialized
Enhancement Delivery Applications
Consumer Health & Licaps,
Biopharmaceutical
Nutrition Banded and • Intrinsically functional • Abuse deterrence
Hard Capsules • Extensive
Hard Capsules Softgel Capsules technologies that capsules (ABUSOLVE™)
address bioavailability – Delayed release
• 11k+ SKUs shipped challenges • Taste-masking
annually of different • Broad portfolio to • Solutions for complex capsules
support “clean label” formulation – Vcaps ® Enteric • Food effect
polymers, sizes, colors, • Lipids-based
print designs and claims, e.g., challenges, including capsules
formulations
regulatory approvals vegetarian, organic liquid, semi-solid and • API stability
– enTRinsic DDT
and non-GMO multi-particulates • Spray-dried
dispersions • Matrix and osmotic • Biologics, including
approaches processing and
• Hot-melt extrusions formulation
• Micronizing / • Inhalation technology,
Nanoparticle including particle
Liquid Fill Hard Cap-in-Cap engineering and DPI
technology
Capsules (DUOCAP™) formulations
• Specialty polymers
• Pediatrics
SGcaps®
Delivery Technologies Platforms Beyond Encapsulation
Lonza Group Ltd, Basel / 15 December 2016 ©Lonza SKU: Stock Keeping Unit Source: Capsugel Management Presentation 14Capsugel: Attractive Growth and
High Profitability
Sales by Business(1) Adjusted EBITDA(1)
in USD mn in USD mn
1'200 1'200 40%
1'065 1'068
1'007
1'000 960 1'000 38%
879
366
355
800 347 800 36%
305
34% 34%
600 600 34%
32%
400 400 31% 32%
699 651
574 613
30%
200 200 364 30%
300 340 344
263
0 0 28%
2012A 2013A 2014A 2015A LTM 2012A 2013A 2014A 2015A LTM
Sep-2016 Sep-2016
Biopharmaceutical Consumer Health & Nutrition Adj. EBITDA Capsugel Adj. EBITDA margin
Lonza Group Ltd, Basel / 15 December 2016 ©Lonza (1) Financials based on Capsugel Management. See appendix for Adjusted EBITDA definition 15Transaction Rationale Lonza Group Ltd, Basel / 15 December 2016 ©Lonza
Acquisition Highly Complements
Lonza’s Healthcare Continuum
Prescription Drugs Personal Care / Wellness
Patented Prescription Drugs
Generic Prescription Drugs
Over-the-Counter (OTC) Products
Preventive Healthcare Products
Well-Being Products
Lonza Group Ltd, Basel / 15 December 2016 ©Lonza 17Adding Oral Delivery Technologies
to Our Healthcare Continuum
Prescription Drugs Personal Care / Wellness
Mammalian Hair Care
Endotoxin Viral Therapy
Commercial HAPI Analytical Services Emollients Formulation
Detection Manufacturing
Manufacturing Concepts
Chemical Commercial Bioconjugation Skin Care
Chemical Clinical Process Cell Culture Hair Care
Cell Line Construction Manufacturing Clinical Formulation Food Emulsifiers
Development Development Products Actives
Development Concepts
Cell Therapy
Stability Dosage Forms / Human Food Preservation Preservation
Clinical Media
Testing Delivery Systems Concepts Personal Care Home Care
Development
Viral Therapy Parenteral
Microbial Clinical Delivery
Clinical Cell Banking Drug Product Vitamins Surfactants
Development Services
Development Delivery
Transfection Devices / Mammalian Clinical Development Functional Skin Care
Primary Cells Disinfectants
QC Testing Solutions Development Services Food Actives Actives
Cell Therapy Microbial Bioconjugates
Expression Systems
Cytotoxins Commercial Commercial Commercial Electrophoresis Assay Solutions Biocides
(Licensing)
Manufacturing Manufacturing Manufacturing
Lonza Group Ltd, Basel / 15 December 2016 ©Lonza 18Increases the Proportion of Lonza’s Revenues
from the Healthcare Continuum
Combination Increases
CY 2015 Revenue of CHF 3.8 bn CY 2015 Revenue of USD 1.0 bn Healthcare Continuum Share
Healthcare
Continuum
approx. 66%
Consumer Specialty
Specialty Health & Ingredients
Ingredients Pharma& Nutrition
58% Biotech 35% Pharma&
42% Biotech
Pharmaceuticals
65% Consumer
Health &
Healthcare Nutrition Part of
Continuum(1) Specialty
Ingredients
approx. 57%
(1) Healthcare Continuum: Comprised of Pharma&Biotech
and Consumer Care Business Revenues
Lonza Group Ltd, Basel / 15 December 2016 ©Lonza Note: Assumes CHF:USD Exchange Rate of 1.00. Does not reflect US GAAP to IFRS adjustments. CY = Calendar Year 19Enhances Global Scale and Competitive Position
Through Integrated Capabilities
Leadership with Significant Scale Leading Player with Integrated Capabilities
(FY 2015; CHF bn)
Finished Dosage Consumer Health &
Capsugel API
Lonza 3.8 1.0 4.8 Form Nutrition
2.2 Healthcare Continuum 1.0 3.2 ✓✓ ✓✓ ✓✓
Patheon(1) 1.8 ✓ ✓✓ ✓
Catalent(2) 1.8 ✓✓ ✓✓
West 1.4 ✓✓ ✓
Siegfried 0.5 ✓
Cambrex 0.4 ✓
0.0 1.0 2.0 3.0 4.0
Note: Healthcare Continuum: Comprised of Lonza Pharma&Biotech, ✓ Existing presence ✓✓ Leading position
Consumer Care Business Revenues and Capsugel total revenue
Lonza Group Ltd, Basel / 15 December 2016 ©Lonza Note: Assumes CHF:USD Exchange Rate of 1.00 Sources: Public Company filings. (1) Fiscal year ending October 2015 (2) Fiscal year ending June 2015 20Creates a Fully Integrated Development,
Manufacturing and Delivery Technology Partner
Formulation Technology and
Active Ingredient Production
Dosage Form Drug Delivery
Parenterals
(Non-Oral Medicine)
Pharma
Pre-Filled Syringes (H1 2017)
DNA Cell Small Tank Large Tank Oral Solids
Development Drug Product
Production
Services Hard Capsules Patient
Consumer Healthcare
Neutraceutical Softgels
Ingredients
Delivery Services
Tablets
Small-Scale Inhaled / Nasal
Commercial
Chemical Dosage Forms Dry Powder Inhaler (DPI)
Compounds
Manufacturing Consumer
Lonza Capsugel
Lonza Group Ltd, Basel / 15 December 2016 ©Lonza 21Uniquely Positioned to Address Evolving
Challenges of Our Customers
Pharma
Meets desire for targeted therapies
• Global scale Shortens development timelines
• Synergistic technologies Reduces risk / unpredictability
• Integrated offerings Rationalizes suppliers to reduce cost
accelerate innovation
Consumer Healthcare
• Deep scientific bench and
strategic partnerships Establishes faster route to market
• World-class manufacturing Meets changing consumer needs and desires
strategically located near Meets demand for greater quality
customers Creates greater differentiation in
competitive markets
Lonza Group Ltd, Basel / 15 December 2016 ©Lonza 22Highly Complementary Offerings Expected to
Enhance Growth and Margin Profile
Top Operating Other
Top Commercial Synergies
Synergies Synergies
Corporate Tax Broaden and deepen customer relationships
(cross-selling)
Procurement Integrate value chain and product offerings,
IT including consumables
Add new high-performance consumer health
product offerings
Enhance market access
Accelerate innovation
CHF ~30 mn p.a. CHF ~15 mn p.a.
CHF ~100 mn p.a. by year 5
by year 3 by year 3
Near to mid-term Mid to long-term
Lonza Group Ltd, Basel / 15 December 2016 ©Lonza 23Financial Impact Lonza Group Ltd, Basel / 15 December 2016 ©Lonza
Estimated Business Combination
Summary 2015
Lonza Capsugel
Combined
Full Year 2015 Full Year 2015
(CHF mn)(3)
(CHF mn)(1),(2) (USD mn)(1),(2)
Revenue 3,803 1,007 4,810
CORE / Adj. EBITDA(1) 793 344 1,137
CORE / Adj. EBITDA Margin(1) 20.9% 34.1% 23.6%
Operating Cash Flow /
667 239 906
Unlevered Free Cash Flow(2)
Capital Expenditures 264 84 348
Employees ~9,800 ~3,600 ~13,400
(1) Lonza standalone CORE EBITDA includes stock-based compensation expense. Capsugel standalone Adjusted EBITDA excludes stock-based compensation expense.
(2) Lonza standalone corresponds to Operating Cash Flow post-Capex. Capsugel standalone corresponds to Unlevered Free Cash Flow post-Capex.
(3) Combination based of sum of Lonza standalone plus Capsugel standalone
Assumes CHF:USD Exchange Rate of 1.00. CORE definition: see appendix. Does not reflect US GAAP to IFRS adjustments.
Lonza Group Ltd, Basel / 15 December 2016 ©Lonza 25Significant Positive Financial Impact Potential
Enhances
Substantial commercial synergies by year 5
Growth
CHF 30 mn of estimated annual operational synergies potential by year 3
Expands
CHF 15 mn of estimated tax syergies potential by year 3
Margins
Expands combined CORE EBITDA margins by ~250 bps by year 3
Delivers
Accretive to CORE EPS in first full year post closing(1)
Accretion
Enhances
CORE RONOA >27% in first full year post closing
RONOA
Improves Strong free cash flow generation to rapidly de-leverage and at the same time
Cash Flow continues to fund growth
Maintains
Dividend policy unchanged
Dividend
Lonza Group Ltd, Basel / 15 December 2016 ©Lonza Note: CORE definition: see appendix. (1) Referring to consensus forecasts for Lonza and depending on Lonza share price at time of the equity raise. 26Proven Track Record of De-Leveraging
Net Leverage (Past and Expected) Target Leverage After
Acquisition of Capsugel
3.9x
3.5x
3.0x ~3x
2.7x
2.1x
2011A 2012A 2013A 2014A 2015A At closing 2017E 2018E
Target to de-leverage to around current levels by year 2
Combined 2015 annual operating cash flow of ~CHF 906 million(1)
Lonza Group Ltd, Basel / 15 December 2016 ©Lonza (1) Assumes CHF:USD Exchange Rate of 1.00. Does not reflect US GAAP to IFRS adjustments 27Capsugel Transaction Financing
Financing Structure (CHF bn)(1) Financing Terms
Fully committed bank financing from Bank of America Merrill
Lynch and UBS of USD 6.2 billion
USD 4.5 billion bridge facility
USD 1.0 billion term loan
CHF 700 million revolving credit facility
5.5 Standby equity underwriting from UBS and Bank of America
Merrill Lynch of up to CHF 3.3 billion
No change in financing strategy
Targeting around 3x pro-forma net debt / EBITDA
Maintaining current investment grade rating(2)
Enterprise Debt Equity
Value Financing Financing Final financing structure to include new equity, term loan and
debt capital markets instruments
Lonza Group Ltd, Basel / 15 December 2016 ©Lonza (1) Assumes CHF:USD Exchange Rate of 1.00 (2) Based on unofficial credit rating assigned by a number of Swiss banks. 28Transaction Timetable Lonza Group Ltd, Basel / 15 December 2016 ©Lonza
Expected Transaction Timetable Announcement: 15 December 2016 Debt syndication expected to commence early January Lonza AGM: 25 April 2017 Equity funding: first half of 2017 Regulatory approval expected by second quarter 2017 Closing expected in the second quarter 2017 Lonza Group Ltd, Basel / 15 December 2016 ©Lonza 30
Conclusion Lonza Group Ltd, Basel / 15 December 2016 ©Lonza
Accelerating Growth
Along the Healthcare Continuum
Excellent deal strategically – further sharpens our market focus
Fully addresses customer needs with broad solutions
Leading integrated solutions provider leveraging strong innovation
Expected to be earnings accretive from the first full year post closing
Sound financing structure – strong cash-flow generation
Lonza Group Ltd, Basel / 15 December 2016 ©Lonza 32A Successful Combination for the Future
“Driving Excellence in Quality to
Create Value for Our Customers”
Lonza Group Ltd, Basel / 15 December 2016 ©Lonza 33Appendix Lonza Group Ltd, Basel / 15 December 2016 ©Lonza
Capsugel: Key Financials
LTM
(USD mn) 2012 2013 2014 2015
Sep-2016
Revenue 879 960 1,065 1,007 1,068
% growth 3.3% 9.2% 10.9% (5.4%)
Gross Profit 386 432 484 472 501
% margin 43.9% 45.0% 45.4% 46.9%
SG&A and Corporate R&D 176 189 204 188 198
% of sales 20.0% 19.7% 19.2% 18.7%
EBIT 211 243 280 284 303
% margin 24.0% 25.3% 26.3% 28.2%
Adj. EBITDA 263 300 340 344 364
% margin 29.9% 31.3% 31.9% 34.1%
Capex 68 51 89 84 82
% of sales 7.7% 5.3% 8.4% 8.3%
Lonza Group Ltd, Basel / 15 December 2016 ©Lonza Source: Financials as per Capsugel Management 35Capsugel Innovation Example:
Spray-Dried Dispersion
Industry Need Capsugel Offering
>50% of marketed drug Spray-Dried Dispersion (SDD): an amorphous
products include poorly molecular dispersion of a drug in a polymer matrix
soluble APIs
Product design, development and
~90% of new clinical/commercial manufacturing
compounds have poor
bioavailability attributed Proprietary equipment, processes and polymers
to dissolution or to optimize formulations and enable new IP
solubility
Next-generation, high-throughput manufacturing
Improving solubility as a technology to accelerate/de-risk technology
formulation goal transfer, scale-up and capacity expansion
Integrated offerings between SDD technology and
capsules, tablets, inhalation and biologics
Lonza Group Ltd, Basel / 15 December 2016 ©Lonza Source: Capsugel Management Presentation 36Capsugel Innovation Example:
Pediatric Formulations
Industry Need Capsugel Offering
Pediatric-friendly Combination of technologies that ease swallowing,
dosage form for clinical improve taste, assure correct dosing and
trial and commercial potentially improve solubility, in a unique,
use to expand convenient final dosage form
addressable market Multiparticulates: Beads, mini-tablets and
segment for a new drug microspheres, with range of modified release options
Taste-Masking: Conceals unwanted/undesired taste
Easier to swallow than
adult tablets and easier Coni-Snap® Sprinkle Capsules: Easy-to-open
to administer than capsule containing multi-particulates to be sprinkled/
mixed with food
existing liquid forms
In various trial phases with customers for pediatric
epilepsy and pediatric oncology products
Lonza Group Ltd, Basel / 15 December 2016 ©Lonza Source: Capsugel Management Presentation 37CORE Results as Defined by Lonza
Lonza believes that disclosing CORE results of the Group’s performance
enhances the financial markets’ understanding of our company because the
CORE results enable better comparison across years.
Therefore, the CORE results exclude exceptional items such as restructuring
charges, impairments and amortization of acquisition-related intangible assets,
which can differ significantly from year to year. For this same reason, Lonza
uses these CORE results in addition to IFRS as important factors in internally
assessing the Group’s performance.
Lonza Group Ltd, Basel / 15 December 2016 ©Lonza 38Adjusted Earnings as Defined by Capsugel Based on Capsugel management Quality of Earnings report which includes non-recurring adjustments for non-cash compensation, sponsor and board fees, restructuring costs, non-controlling interest, public company readiness and other one-time costs. Lonza Group Ltd, Basel / 15 December 2016 ©Lonza 39
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